Hargreaves Lansdown: margin call

Hargreaves Lansdown -office-daytime.jpg

Even loyal clients might want to look for an alternative hedge

Monte dei Paschi: Sienese spectacle

Another year, another rights issue. Will this be the last?

Apple Watch
©Tim Bradshaw

Apple: the next small thing

There are whispers of weak demand for the Watch

Hewlett-Packard: calculated moves

The tech group has shown willingness to make hard choices. There are still more to be made

Royal mail: defined disbenefits

Company’s pension woes are both arcane and important

CVS/Omnicare: While the iron is hot

It’s a good time to be a buyer but a better time to be a seller

Oil tankers: tanked up

Surging Asian demand has caused crude carrier rates to boom

Raiffeisen and Erste: battling

The Austrian lenders face different challenges further east in Europe


Booker: boring but brilliant

Wholesaler’s purchase of Musgrave will increase exposure to south-east and add scale

Hong Kong: gamble with care

The share price plunges of Hanergy and Goldin do not necessarily mean regulatory action is needed

  • Just Eat: a whole lotta kebabs

    Just-Eat offered to pay £445m (A$867m) for Australian take-away delivery company Menulog. That’s a whopping 371 times earnings (before interest, taxes, depreciation and amortisation). Using last year’s results as a starting point, what does Menulog need to deliver to make that price reasonable?

    Our initial calculations of what Menulog needs to deliver were challenged by some Lex readers… and while Lex is never wrong, we are willing to become more right, if given the opportunity. So the analysis below has been changed since it was initially published (the changes are detailed at the bottom for anyone interested).

  • Pretty little shells?

    So maybe things are starting to get a little overexcited in Hong Kong. We notice two recently listed micro cap companies that have had stratospheric rises.

    Firstly Yan Tat Group, a printed circuit board manufacturer with revenues of $86m. In 4 days the market capitalisation had gone from just over $300m to a high on Friday morning of $3.2bn. At that high, the share price was up over 3 times versus Thursday’s close. At pixel time, however, the share price was down over one third from Thursday’s close and falling. That is an intraday swing in market capitalisation of $2.5bn.

  • The math behind Heinz/Kraft

    Missing from the press release on the Kraft Heinz deal is just how much explicit value Kraft shareholders are getting. It’s an odd structure where Kraft gets 49 per cent of the new company PLUS a one-time dividend of $16.50.

    Kraft shares have traded up to more than $80.

  • Ocado, mashed into guacamole

    Lex has a tricky realtionship with go-go e-retail businesses. Their valuations – that is, the relationship of their stock prices to their profits – imply long-term growth rates inconsistent with the normal competitive pressures in retail. So mostly we make surly comments about them. There is, however, another side of the story. Online retail leadership does seem to persist. So in a recent note about Ocado, the UK grocer, we departed a little from our previous dour tone, and tried to articulate the bull case. Here is our summary:

    [sceptics about Ocado's valuation] have failed to accept the core principles of online retail investors. Namely that much more of the market will convert to online; that the leader online, because of economies of scale, will never be overtaken by the also-rans; that margins online will expand beyond those of the traditional competitors; and that the bricks-and-mortar leaders will never become digitally competent. Accept this catechism, and all else follows. It is easy to doubt the four together, but in Ocado’s case, no one of them is obviously wrong, either.